ACCC says broadband take-up strong but number of services low

SydneyJune 20 2002

Australia's competition watchdog today said broadband take-up by local users had grown promisingly, but warned providers that the number of broadband services remained low.

Australian Competition and Consumer Commission chairman Allan Fels said at the end of March there were 251,500 broadband services connected across Australia - double the amount of connections at the end of July 2001.

Professor Fels said, however, the ACCC would monitor the market and look closely at any behaviour by those with market power to stifle competition through high prices or by holding back access to new services.

The take-up figures were issued by the ACCC in an update to its Snapshot of Broadband Deployment.

"While this report shows promising levels of growth in the take-up of broadband services, the overall number of services remains low," Professor Fels said.
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"The pace of uptake of technologies such as high-speed internet services should, where possible, be driven by consumer demand for, and access to, the best available technology."

Professor Fels said where necessary the ACCC would act to change behaviour in the market.

Professor Fels noted the ADSL competition notice issued to Telstra Corp Ltd in September last year was an example of where the ACCC had moved to address conduct that was having an adverse effect on the availability of new services to consumers.

In May, Telstra had came into line with ACCC guidelines on its wholesale high-speed Internet services, prompting the watchdog to lift the notice.

To come into line, Telstra made price reductions of up to 25 per cent in its wholesale ADSL broadband service charges.

It also changed the architecture of the ADSL Internet service which allowed other companies to compete with it and offer their own high-speed services.

ADSL is an asymmetric digital subscriber line network which allows the delivery of high speed broadband over existing copper phone lines, generally owned by Telstra.

Broadband is the transmission of large amounts of electronic information including telephone calls, television and the internet, often over phone lines but also over pay TV cables or via satellite.

Professor Fels said the growth in take-up of digital subscriber line (DSL) services had significantly exceeded the growth in takeup of cable technologies.

"Take-up of DSL services increased by 206 per cent in the nine months to March 2002," he said.

"By comparison, there was a 71 per cent increase in the number of subscribers for cable broadband services - although the number of cable services, 157,800, still significantly exceeds the number of DSL services, 85,800."

He added the number of overall services remained low.

Professor Fels said broadband infrastructure was of particular and growing importance to the future of Internet services.

"For the Internet to develop beyond its existing technical and commercial limitations, it needs broadband access technologies made available on a reasonable basis," he said.